Big Oil Did Not Happen Overnight

Big Oil Did Not Happen Overnight

$OIL, $USO, $SHI, $RDS-A, $XOM, $BP, $TOT, $CVX, $LUKOF

As in all industries that benefit from economies of scale, the Crude Oil and Nat Gas industry has seen many, many mergers and acquisitions over the past 100+ years that have produced the World’s 10 biggest petroleum energy companies.

1. Sinopec: While Sinopec (NYSE:SHI) has the greatest annual revenue of any of the world’s Oil & Gas companies, with $455.06-B in Y 2014, it actually has the lowest Crude Oil production of any of the companies on this Top 10 list. Much of its revenue is derived from the sale of other Crude Oil derived products, like fertilizers and chemical fibers.

HQ’d in Beijing, China, Sinopec produces 1.6-M BPD and holds $226.67-B in total assets. Sinopec became a global leader through its acquisitions of New Star Petroleum Company (2001), Hainan Petrochemical Co., LTD (2006), Shengli Petroleum Administration Bureau (2006), Addax Petroleum Corp. (2009), and Daylight Energy (2011).

2. China National Petroleum Corp: Also HQ’d in Beijing, China National Petroleum (CNPC) comes just behind Sinopec with a Y 2014 revenue of $432-B, but outstrips Sinopec’s daily production, producing 4.4-M BPD of Crude Oil. CNPC is a state-owned company

The company’s assets total $481.07 -B. In Y 2005, China National Petroleum acquired PetroKazakhstan, a Calgary (Canada) based company that saw tremendous growth after opening Oilfields in Kazakhstan.

3. Royal Dutch Shell: Royal Dutch Shell (NYSE:RDS-A) is appropriately named, The House of Orange (The Dutch Royal Family) are reported to own a large stake in the company. Shell is HQ’d in The Hague, and holds $353.16-B in total assets and grossed $422.11-B in revenue in Y 2014, producing 3.9-M BPD of Crude Oil.

The company has nearly a 100 years of Oil company acquisitions, beginning with Mexican Eagle Petroleum Company (1919), Solarhart (1979), Shell Oil (1985), Enterprise Energy Ireland (2002), Shell Canada (2006), East Resources (2010), and BG Group (2015). BG Group has rights to export American Nat Gas, a developing and lucrative market for Oil companies.

4. ExxonMobil:  ExxonMobil (NYSE:XOM) is a product of a Y 1999 merger that was, at the time, the largest in history, creating the largest company on our Planet. In a sense, this was less a merger than a case of 2 companies reuniting, as Exxon and Mobil were both descendants of John D. Rockefeller’s Standard Oil Company (founded in Y 1870).

Now HQ’d in Irving, Texas, ExxonMobil produces 5.3-M BPD of Crude Oil, and had a Y 2014 revenue of $394.11-B. ExxonMobil’s total assets are valued at $349.49-B.

5. Saudi Aramco: Saudi Aramco was originally a joint US-Saudi venture before the Saudi government bought out California Oil company Aramco. HQ’d in Dharan, Saudi Arabia, Saudi Aramco has an estimated $30-T of assets and produces 12.5-M BPD of Crude Oil. The company grossed $378-B in Y 2014.

6. BP: In 1998, British Petroleum (NYSE:BP) acquired Amoco. The latter company had a history in innovation in gasoline retail, developing the 1st examples of the gasoline tanker truck, drive through filling stations and unleaded gasoline.

The London, UK-based BP now holds an estimated $284.3-B in total assets and grossed $358.70-B in Y 2014. BP has a daily Crude Oil production of 4.1-M bbl . The company acquired Standard Oil of Ohio, originally part of Rockefeller’s Standard Oil Company in Y 1978. Further acquisitions include Arco (2000; later sold to Tesoro Corporation in Y 2013), and Burmah Castrol (2000), a London HQ’d petroleum company with operations in Bangladesh, India, and Myanmar.

7. Total S.A.: Total S.A. (NYSE:TOT) is less an Oil & Gas company than a diversified energy company. In Y 2011, Total S.A. acquired SunPower, a California company focused on the development of solar power implements and created panels that were used to power NASA’s Pathfinder aircraft.

HQ’d in Paris, France, Total S.A. holds $229.79-B in total assets and produces 2.7-M BPD of Crude Oil. The French company grossed $260.02-B in Y 2014. Total S.A. has acquired Vickers Petroleum (1980), Petrofina (1999), Elf Aquitaine (2000), and SunPower (2011).

8. Kuwait Petroleum Corporation: HQ’d in Kuwait City, Kuwait, the Kuwait Petroleum Corporation is unique in that it is the only one of the Top 10 largest Oil companies that has never acquired another Oil company. In 2014, Kuwait Petroleum Corporation grossed $251.94-B The Kuwaiti company has an average daily Crude Oil production of 3.2-M bbl.

9. Chevron Corporation: San Ramon, California based Chevron Corporation (NYSE:CVX) produces 3.5-M BPD of Crude Oil. Chevron’s Y 2014 revenue was $192.31-B and the company’s total assets are $266.02-B. Chevron has acquired US Oil companies Gulf Oil (1984), Texaco (2000), and Unocal Corporation (2005), which had operations in the US, Afghanistan, Pakistan, and Indonesia.

Fact: Gulf Oil, before its acquisition by Standard Oil of California (later Chevron), Gulf was considered one of the “Seven Sisters,” the huge Oil companies that dominated the industry during the 1940-1970’s, and it represented a major source of revenue for the Mellon Family of Pittsburgh.

10. Lukoil: HQ’d in Moscow, Russia, Lukoil (OTCMKT:LUKOF) produces an estimated 2.2-M BPD of Crude Oil, and grossed $144.17 -B in Y 2014. Lukoil’s total assets are valued at $111.35 -B. The company’s acquisitions include Getty (2000), Scholtzmeyer Bros. (2004), and Turkish Oil company Akpet (2008), which increased their international holdings by 18%. Getty owned a majority share of the TV channel ESPN before its purchase by ABC.

As this history of M&A (mergers and acquisitions) shows, the energy giants we know today did not happen overnight. From Asia to America, these companies look to diversify their operations by investing in Green technologies such as solar power, while others strive to purchase companies located across the globe to become the major players they are today.

Expect more M&A in this sector going forward.

Stay tuned…

HeffX-LTN

Paul Ebeling

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